What is a consignment arrangement? Explain the accounting treatment of goods held on consignment.

Q: Describe how revenue recognition relates to transferring goods or services.

A: Revenue:   It refers to the earnings of an enterprise from their normal business operations for a…

Q: Income arises from the following except: A. sale of merchandise to customers B. rendering of…

A: Income refers to the amount received from day to day activities of the business such as…

Q: What amount should be presented as a deduction from cost of goods sold?

A: The GAAP principles require that the inventory should be valued at the lessor amount of its laid…

Q: Where should goods in transit that where recently purchased f.o.b. destination be included on the…

A: FOB destination: When the seller bears the freight charges for the delivery of merchandise from the…

Q: What is the accounting treatment for supplies inventories if the purchases method is used to record…

A: Supplies generally form a part of current assets of the entity and represent the amount of supplies…

Q: In bill of exchange the payment is received by

A: Option (d) is the correct answer

Q: Describe FOB shipping point and FOB destination. When does the buyer take ownership of the goods,…

A: Transportation Costs: The costs of delivering the merchandise inventory from the manufacturer to the…

Q: Discuss the realization principle and how it is applied in the recognition of revenue. Does the…

A: Definition: The revenue recognition principle: The revenue recognition principle refers to the…

Q: Explain how the accounting treatment differs between purchased and internally developed intangible…

A: Intangible assets: Intangible assets are the long-term assets having no physical existence. However,…

Q: Define Sale of Receivables.

A: Sales: A sale refers to the operating activity through which the company earns income by selling…

Q: otal of trade receivables remaining

A:

Q: When is the financial components approach to recordingthe transfers of receivables used? When should…

A:

Q: Explain the revenue recognition principle.

A: Accounting principle:

Q: Payment for acquisition of merchandise antory are ren orted as investing aporte

A: Payment for acquisition of merchandise inventory is done as a part of normal business operations.…

Q: Are donation of goods considered an expense or cost of sale on statement of profit and loss or other…

A: Donation is a part of voluntary activity. It is not part of business consideration. Anything given…

Q: b. What was the invoice amount of the merchandise that was returned?

A: Net method -Under this method, the discount is deducted from the Sales Value and only net amount is…

Q: How is inventory valuation made? Explain?

A: Stock or inventory are important yet inert resources lying with the organization at the end of an…

Q: Why do you add transportation in and do not deduct delivery expense when determining the cost of…

A: For a buyer, the cost of merchandise purchased is considered as a net cost incurred to buy the…

Q: When should the transfer of receivables be recorded as a sale?

A: When a Note receivable is passed to a Transferor, the transferred value is separated from the…

Q: What is Receipt and Payment Account? How is it different from Income and Expenditure Account?

A: Receipts and payment account is a real account. This account is a summarised cash book which…

Q: Under the revenue recognition principle, when is revenue recorded?

A: Revenue recognition principle:Revenue recognition principle is used as to recognize the revenues…

Q: Explain how the accounting for merchandise purchases and sales is different between accounting under…

A:

Q: What is Target’s policy with respect to accounting for merchandise returns?

A: Financial Statements: Financial statements are a group or reports that present the financial…

Q: Discuss the three types of lender control (Blanket Inventory Liens, Trust Receipts, and Warehousing)…

A: A lender is an entity that provides financial assistance to the another entity known as borrower who…

Q: Why Do Transferors of Receivables Generally Want to Account for the Transfer as a Sale?

A:

Q: Explain the concept of American depositary receipts (ADRs).

A: Answer: Meaning of American depositary receipts (ADRs): American negotiable securities that signify…

Q: Who bears the freight when the terms of sale are (a) FOB shipping point, (b) FOB destination?

A: (a)If the sale is made with the terms FOB shipping point, the goods' ownership is transferred at the…

Q: Explain the difference between freight in and freight out. Who pays for each? Who owns the goods…

A: Freight refers to the transportation cost paid on the goods. Freight in is the transportation cost…

Q: difference between the cash basis and accrual basis of accounting

A: In cash basis of accounting, receipts and payments are treated as income and expenses respectively.…

Q: inventory?

A: The allowance for outdated inventory account is a reserve that is kept as a contra asset account so…

Q: What is freight out, and how is it recorded by the seller?

A:

Q: How do you determine the invoice of merchandise returned?

A: Merchandise return refers to the inventory that is returned by the customer to the seller for their…

Q: Explain the accounting issues for recording goodwill.

A: Definition:   Goodwill: In terms of accounting, goodwill may be defined as an intangible asset that…

Q: Describe the steps to record non monetary asset exchange.

A: Definition:   Non- monetary exchange: When fund transfers are not involved in the exchange and the…

Q: Which freight is capitalizable or inventoriable cost by the consignor on the consigned goods under…

A: The consignee is the person who takes the goods from consignor to sell it to final customers. He…

Q: Discuss the treatment of imported goods for (a) Transit and (b) Transshipment, in terms of liability…

A: The fee levied on commodities when they are carried across international boundaries is known as…

Q: Explain the difference between monetary and nonmonetary assets and liabilities.

A:

Q: Distinguish between Receipts and Payments Account and Income andExpenditure Account.

A: Revenues: Revenues are earnings from operations of a business. The operating activities are sale of…

Q: Where is the amount of merchandise inventory disclosed in the financial statements?

A: Merchandise Inventory:   It refers to the current assets that a company expects to sell during the…

Q: What is the nature of a sale on consignment?

A: Consignment is a business sale transaction between a consignor and a consignee. Under consignment…

Q: What are the criteria for determining whether a sale of receivables has occurred?

A: Receivables: Receivables refer to an amount to be received in future. General classifications of…

Q: When dealing with receivables, give an example of a subsidiary account.

A: Accounts receivable:   Accounts receivable refers to the amounts to be received within a short…